Item 5 - Fees and Compensation
A. Below is a discussion of how the Adviser is generally compensated in connection with
providing advisory or asset management services to the Clients. However, the Adviser is able
to enter into different fee arrangements on a Client-by-Client basis. A potential investor should
read and review any and all advisory and governing documents with respect to each Client in
their entirety before making any investment decisions. Any reference herein to an “affiliate” of
the Adviser shall be deemed to be a reference to an entity that is owned, directly or indirectly,
by Rocktop Tech.
Certain Clients pay (either directly or indirectly) a one-time upfront due diligence fee (each a
“Due Diligence Fee”) equal to the product of (a) between 0.35% and 0.50% times (b) the
aggregate unpaid principal balance of the loans in each Portfolio Investment reviewed by the
Adviser. In addition, the Adviser is paid an ongoing advisory fee equal to (i) the product of (x)
0.50% times (y) the aggregate unpaid principal balance of the loans in the Portfolio Investment
as of the first day of each month divided by (ii) twelve (12) (each an “Advisory Fee”).
The Adviser will typically receive certain allocations and distributions calculated and charged
based on a share of capital gains on or capital appreciation of the assets of the Client, as
negotiated and determined at the time the Client is established and as set forth in its Offering
Documents. These allocations and distributions are commonly known as a “Success Advisory
Fee.” The Advisor generally does not receive the Success Advisory Fee until the Clients (or
their investors) have received aggregate distributions equal to the sum of their capital
contributions or cost basis in the Portfolio Investments and, in some cases, until the Client or
its investors have received aggregate distributions equal to a specified minimum return above
and beyond the sum of their capital contributions or cost basis.
The Clients also incur costs associated with the ongoing management of the Portfolio
Investments (“Operating Expenses”). Operating Expenses can consist of all costs, expenses, or
charges with respect to the operation of the Client, including, without limitation, all payments
with respect to Client indebtedness (including that owed to partners), taxes and other carrying
costs of the Client’s assets, administrative costs to administer the Client and the limited
partnership agreement or limited liability company agreement, including costs for audit and tax
return preparation, reporting, and filing, and any property-level costs incurred in connection with
Portfolio Investments.
From time to time, the Adviser may engage certain affiliates to provide certain services to its
Clients. The Adviser will only utilize the services of an affiliate if it makes a good faith
determination that the fees and expenses to be charged by the affiliate are fair and reasonable
in comparison to what other providers would charge for comparable services. The Adviser will
disclose to each of its Clients information regarding the fees and expenses that will be charged
to such Clients by affiliates of the Adviser.
The Adviser may agree with certain Clients to a variation of the terms set forth in the Advisor’s
advisory and governing documents, including different Due Diligence Fees, Advisory Fees,
Success Advisory Fees and withdrawal rights.
B. Due Diligence Fees, Advisory Fees, and Success Advisory Fees from the Clients are paid as
indicated in Item 5.A. above.
C. The Adviser does not intend to charge any fees due to it in advance.
D. Other than as described above, neither the Adviser nor any of its supervised persons receives
any compensation from the sale of securities or other investment products.